Tenant is Always Liable for Utilities, Right? Think Again

If you believe that your tenant is always liable for utilities, you might want to think again.

Philadelphia Gas Works, in the 165 years that it’s powered our sixth largest city, has grown weary of the financial drain caused by deadbeat tenants who skip out on the bills.

Now, it will look to landlords to do something about it.

The rationale: Why pass the cost on to all of Philly’s customers, when it’s the landlords who benefit from the access to gas service on their properties.

This is not an uncommon position. In fact, many utility companies around the country require the property owner, as a condition to receiving service, to sign up as a ‘reverter’, the party that becomes liable when the tenant moves out. Of course, the landlord is also liable for payment of services during any period of vacancy.

But PGW has taken it a step further. With the backing of the state’s legislature, it revived an antiquated law that allows it to levy liens – not on the tenant, but on the rental property itself.

Public comment to the proposed law pointed to the landlord’s dilemma: “If the tenant put the utility in their name and skips, why should the landlord have to hunt them down, or pay it for them, when the service was personal to them?”

But the law was enacted with the lien provisions in place.

Will other states follow suit?

PGW is offering an olive branch: The Philadelphia Landlord Cooperation Program. By applying for the program, the landlord can receive notice of delinquencies and, for now, be protected from the filing of liens during this pilot program. That is, if they register and stay off the “uncooperative landlords” list.

PGW pledges to make “all efforts” to collect from the tenant, but their goal is clear: “We must be paid for gas provided to customers.”

What do you think? Please share you insights below.

Interested in submetering? Find out how it can force your tenants to conserve gas, electricity and water. Click here for more.

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